On April 4, 2019, President of Toyota Vietnam, Mr. Toru Kinoshita and other managements such as Finance Director, Purchasing Director … paid a working visit to Ha Noi Plastic Joint Stock Company (HPC), a member of An Phat Holdings.

Senior management representative of An Phat Holdings and all HPC’s BoD were attended and welcome Toyota Vietnam leaders. The visit and work of Toyota Vietnam’s delegates was a part of supporting program on management and production organization since 2018 for HPC. Under this program, HPC has carried out Dandori (quick mold installation) and Tei-Tei (arranging production on a continuous machine according to plastic type and keep rotating the same principles base on Toyota’s global production principles) to organize scientific production and reduce production costs to the level the shortest.

Currently, Toyota Vietnam is one of HPC’s largest customers.

At the meeting today, the representative of An Phat Holdings and HPC presented the improvements that HPC has applied under the program as well as achievements in production and organizational management.

Mr. Toru Kinoshita highly appreciated the efforts and innovation of all HPC employees. Mr. Kinoshita said that during this visit, he saw clearly the positive changes of HPC compared to 1 year ago, thanks to the spirit of changing and the serious investment of An Phat Holdings since officially owned HPC as a member company.

Representative of HPC, Chairman Bui Minh Hai committed to maintain and further improve to match with Toyota target so that 2 companies can speed up the localization strategy.
Toyota Vietnam and HPC have good cooperation during last decade
–  2010, the number of product was only 01 part.
– 2018, the number of product increased impressively to 30 parts.
– 2019, forecast numbers still continue to increase with strong intention from An Phat Holdings and plastic supporting industry

Certainly, with the new orientation of An Phat Holdings, Hanoi Plastic will have more achievements in meeting the increasing requirements of Toyota Vietnam in particular and other customers in general.

Becoming a second-tier vendor of Samsung is the sweet fruit of more than one year of non-stop efforts to restructure An Phat Holdings, and will become the basis to realise its ambition to become the Southeast Asia’s leading high-tech plastics manufacturer.

The sweet fruits of massive efforts

On March 31, An Trung Industries Joint Stock Company, a subsidiary of An Phat Holdings, signed a contract with Elentec Vietnam Co., Ltd. (which is a mobile phone plastic component supplier for Samsung) to become the latter’s second-tier vendor.

According to the contract, An Trung Industries has been supplying plastic components for Elentec since March 2019. These components will be installed on Samsung mobile phones, contributing to bringing “Made in Vietnam” products to customers all over the world.

In order to get this achievement, An Trung Industries had to restructure its operations and invest in technology and human resources to meet the strict requirements of its partner on quality, price, and timely delivery. The company invested VND400 billion ($17.4 million) to develop a 13,000 square metre plant with 42 manufacturing lines imported from Japan and South Korea.

Mr. Man Chi Trung, General Director of An Trung Industries, said, “We had to redouble our efforts to become a vendor for Samsung, which is the world’s leading mobile phone manufacturer with very strict quality requirements.”

The result shows that An Trung Industries’ products satisfy the global standards that Samsung issued for its vendors. It also means that the company’s products are of a similar quality to products manufactured in South Korea, Japan, and Europe.

Mr. Cho Chang Hyun, General Director of Elentec Vietnam, said, “We highly appreciated An Phat Holdings’ investment in An Trung that enabled An Trung to obtain this achievement.”

At present, An Trung Industries is focusing on manufacturing technical plastic components with a capacity of 9 million products per month. Along with Samsung, the company is a partner to 10 other large-scale enterprises operating in the electronics and power sectors.

The company plans to add coating and plating technology lines in order to meet its partners’ requirements.

Ambition to become the leader in plastic supporting industry

In Vietnam, the number of plastic manufacturers is very large. However, most of them specialise in manufacturing household plastic items and only a few enterprises produce plastic to support industrial production due to barriers in investment capital and technology.

Meanwhile, the supporting industry appeared in Vietnam over 20 years ago, after multi-national groups like Honda and Toyota opened their first plants and started looking for local vendors in order to save time and expenses.

In reality, more and more enterprises appear on the selection lists of these large groups, especially Samsung, every year, but only a few can make it into the last selection round.

In Samsung’s case, the corporation assigns experts to nominee enterprises to advise and help them to improve their manufacturing capacity and management processes. At the final round, General Director of Samsung will visit the enterprises to decide whether they can become a vendor. Numerous local enterprises were rejected from the final list because they failed to live up to Samsung’s requirements.

Local enterprises have to improve massively to become vendors for large groups, but more and more are willing to try as they get fruitful results if they succeed. Notably, they will have the opportunity to receive technology transfer and access to the global supply chains. Besides, their brands will be more famous and they will be able to have more large customers.

In An Phat Holdings’ case, the company took advantage of being a leading plastic manufacturer in Vietnam and Southeast Asia to expand its operation. In 2018, the company purchased Hanoi Plastic JSC (HPC) and entered into a co-operation with VinFast to establish VinFast-An Phat (VAPA) Ltd. In addition, the company expanded its investment in An Trung Industries.

Via HPC, An Phat Holdings can take advantage of HPC’s customer base which includes Toyota, Honda, and Piaggio to expand operations. Besides, HPC’s advantage in manufacturing components for automobiles, scooters, and electronic will help An Phat Holdings realise its ambition to set its foot in the supporting industry.

VAPA is a joint venture with VinFast, thus, it will contribute to dealing with the consumption for An Phat Holdings’ products. Finally, An Trung Industries becoming the second-tier vendor for Samsung helped An Phat Holdings affirm its brand in the market, while simultaneously providing an opportunity for the company to continue expanding its operations.

After a review on the operations of An Phat Holdings in the past year, it is easy to see that the general strategy of the company in the supporting industry is investing, expanding operations, and increasing its valuation via becoming a vendor for large groups.

Mr. Dinh Xuan Cuong, CEO of An Phat Holdings affirmed that An Trung Industries and HPC will be the two “key cards” to help the company establish a solid foothold in the supporting industry.

Dear Shareholders and Investors!

2019 is coming, we would like to send our best wishes and sincere thanks to our shareholders and investors who have supported and accompanied AAA in recent years.

In 2018, the global economy and politics was unstable, with an increase in trade protectionism, the US-China trade war kept happening, the oil prices frequently fluctuated causing many difficulties for plastic producers. In this context, Board of Directors, Board of Management and the total employees of AAA have made every effort to achieve the goals set by the General Meeting of Shareholders, specifically:

–           Consolidated revenue in 2018 was expected to reach VND 7,000 billion, exceeding 17% of the plan. In particular, revenue from packaging increased by 40% compared to 2017 thanks to the operation and increased capacity of factories 6 and 7. Export market share in Europe and Japan remained stable, along with increasing exports to the US market.

–           Profit after tax was estimated at 200 billion VND, equivalent to 60.6% of the plan. Due to the policy of stabilizing the selling price to accelerate the operation capacity of new factories for packaging, and owing to a number of delayed contracts to early 2019, the profit did not meet the proposed plan.

–           Profit after tax was estimated at 200 billion VND, equivalent to 60.6% of the plan. Due to the policy of stabilizing the selling price to accelerate the operation capacity of new factories for packaging, and owing to a number of delayed contracts to early 2019, the profit did not meet the proposed plan.

In 2019, it is expected that there will be a lot of opportunities as well as challenges for AAA, when the oil price oil is unpredictable, requiring AAA to expand the supplier network to get the competitive material sources, and continue applying the policy of signing short-term orders to minimize the risk of fluctuations in raw material prices. However, the world trade tensions, particularly the US-China trade war, also create opportunities for AAA to boost exports to the US market and the shift of FDI enterprises from China to Vietnam also brings potential opportunities to take advantage of An Phat Complex High-Tech Industrial Park.

In 2019, we expect a revenue of 7,900 billion and profit after tax of 510 billion (an increase of 155% over the same period, equivalent to 310 billion). This profit growth ensures the earnings per share (EPS) of VND 2,550 and the expected dividend of 10-15% in 2019. Strong growth in profit after tax comes from the improvement of profit margin and restructure the product portfolio of AAA, accelerate the exploitation of An Phat Complex Industrial Park, improve the net profit margin of An Thanh Biscol’s raw material trading activities and profit from An Vinh industrial packaging project and An Trung engineering plastic project.

AAA’s Board of Directors and Management believe that based on the positive foundations that it has built with the appropriate business strategy, competence, will and responsibility of the management team and employees, AAA will continue to consolidate and enhance the position in the plastic industry and strive to create higher value for shareholders in 2019 and the following years.

Sincerely yours,                                                                                                                              

An Phat Plastic and Green Environment JSC (AAA) is Southeast Asia’s number one enterprise in manufacturing thin-film plastic packaging with a total capacity of 8,000 tons of products / month. Not only exported to Japan and Europe, recently AAA has provided compostable AnEco  bags to Vinmart supermarkets. With a growth business, AAA has maintained a strong breakthrough for many years. Recently, Mr. Nguyen Le Trung – General Director of AAA has shared with us about the business results of 2018 as well as the business plan of the next year. 

“… Currently AAA is going in the right direction and we are using the right investment source. Long-term projects require a certain amount of investment and time to get good results and in the near future, AAA’s profits will grow strongly again. In 2019, we aim for AAA’s consolidated revenue target of VND 7,900 billion and net profit of VND 510 billion. ” 

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